NYTD Turns in Operating Profit

The online division of The New York Times Company turned in an operating profit during the first quarter of 2002, thanks to stronger demand for display advertising and sales of premium content.

The results helped the New York Times Digital (NYTD) show an operating profit of $200,000, its third consecutive quarter to do so, compared to an operating loss of $7.7 million in the first quarter of 2001. Although it did not break out profit and loss statements for the division further, it said its goal is to achieve an operating profit for full year 2002.

Revenues were $16.2 million, up 15 percent compared to the $14.1 million in sales during the same, year-ago period.

Although the revenues were down slightly from the $16.9 million it took in during the fourth quarter, they were enough to offer a modest piece of evidence that the advertising recession of the past 18 months may be easing.

The company said stronger advertising demand, particularly in the studio entertainment, travel and finance categories, as well as increased sales of premium products such as archives and crossword puzzles, helped improve revenues. Among classified advertising sales in the division, real estate showed the most strength.

The online division said it achieved positive cash earnings (earnings before interest, taxes, depreciation and amortization) of $2.1 million in the first quarter, its fourth straight. During the same time a year ago, its EBITDA loss was $6 million.

The results for the digital unit also helped offset the parent company’s overall revenues, which fell by 5.3 percent to $737.1 million during the quarter. Advertising revenues for The Times’ total newspaper group were off by 11.2 percent to $448.7 million, again on lower advertising volume.

As a result, The New York Times Company’s said its net income fell by 14.6 percent to $59.6 million, or 39 cents per diluted share. During the first quarter of last year, the New York Times Company declared net income of $69.8 million, or an adjusted 43 cents per diluted share.

Without counting special charges for layoffs, the net income was $54.5 million, or 35 cents per share, down 22.7 percent from an adjusted $70.5 million or 43 cents per share in the first quarter of 2001.

Russell T. Lewis, president and chief executive of the company, said the continued improvement in the digital division helped offset the results.

The company said it remains optimistic that the improvement in the advertising market will continue as the economy improves.

“If, as we expect, the advertising markets recover in the second half of the year, we expect our full-year earnings per share will grow in the mid-single-digit to low-double-digit range. If there is no recovery in 2002, we believe modest earnings per share growth is still possible.”